TECHNOLOGY

TECHNOLOGY; Judge Orders Napster to Police Trading

By MATT RICHTEL

Published: March 7, 2001

SAN FRANCISCO, March 6—
A federal judge has ordered Napster to curb the exchange of copyrighted music on its Internet service, a ruling that threatens to cripple the company and to undermine the activities of millions of people who flock to Napster each day to freely copy songs.

The judge's injunction, issued late Monday and published today by the court on its Web site, requires Napster to prevent users from trading unauthorized files within three business days of receiving notice from aggrieved copyright holders. Napster had previously said such an injunction could force it to shut down altogether, but the company issued a short statement today saying it would seek to comply with the terms, presumably while remaining in business.

Still, the order, which takes effect immediately, appears to signal the end of an era for Napster. The five major record companies, which sued Napster asserting the company abets copyright infringement, have said they hold the copyrights to as much as 70 percent of the work traded on the online service.

''Napster's going to be much different,'' said Eric Scheirer, an industry analyst with Forrester Research, a market research firm. ''You're not going to be able to find the stuff you find at the record store.''

But the injunction, issued by Judge Marilyn Patel of the United States District Court in San Francisco, also places a burden on the record companies. The ruling requires the record companies not only to provide the names of songs to which it owns the copyrights, but also to find evidence those songs are being traded on Napster. The companies have previously asserted that this requirement places an unfair burden on them.

Still, the record companies embraced the injunction today as providing much-awaited relief. They said they would seek to comply promptly with the requirement that they give Napster lists of songs to which they own the copyrights, but declined to say how many songs this would entail.

Anticipating the ruling, users of Napster have flocked to the site in recent months, exchanging millions of files each day. The company, started two years ago by a 19-year-old college student, said it had around 65 million registered users, of whom 10 million use the service each day, and as many as 2 million at any given time.

Napster users also have taken other steps to preserve the ability to trade music. Some users are testing other services that, unlike Napster, do not have centralized servers and will be more difficult for record companies to police. Other Napster users are seeking to skirt the bans by modifying the way they name songs on the service; for instance, if Napster seeks to block exchange of the song ''Fade to Black'' by Metallica, Napster users may modify the name to ''Fade 2 Black'' to evade a filter.

Such efforts have helped Napster users in part evade a filter that Napster unilaterally put in place starting Sunday night, a block aimed at preventing users from searching for songs by Metallica and Dr. Dre. Mr. Scheirer said that even if some users sought to evade the filters, the injunction was ''likely to become effective against most Napster users.''

Judge Patel's ruling modifies an injunction originally ordered in July of 2000, when she found that Napster had been used for the wholesale infringement of copyrighted works. Two days after her ruling, the United States Court of Appeals for the Ninth Circuit stayed Judge Patel's injunction. Then last month, a three-judge panel from the Ninth Circuit issued a ruling supporting much of the legal reasoning behind Judge Patel's original order, but requiring her to narrow the scope of her injunction.

As required by the Ninth Circuit opinion, the modified injunction issued Monday requires Napster and the record companies to share the burden in identifying copyrighted works exchanged by Napster users. The injunction also requires both the record companies and Napster to seek to identify variations of song names, like deliberate misspellings used by Napster users to evade the filters.

In a hearing held Friday to discuss the scope of the injunction, the record companies had asked Judge Patel to include in an injunction a provision allowing them to provide Napster with a list of songs before their release in record stores. In a heated exchange between the litigants, the record companies argued Napster should have to filter songs pre-emptively, while Napster asserted that the requirement would be an undue burden and that it should not be required to filter a song until it first was exchanged by users.

On this matter, Judge Patel's ruling left some room for interpretation, according to legal experts. Judge Patel wrote that the record companies may provide Napster with a list of songs before their release. She then went on to say that Napster must block access ''beginning with the first infringing file.''

But a few sentences later, Judge Patel wrote that Napster must block ''transmission of these works in advance of their release.''

''To order otherwise,'' Judge Patel wrote, ''would allow Napster users a free ride for the length of time it would take plaintiffs to identify a specific infringing file and Napster to screen the work.''

Mark F. Radcliffe, an intellectual- property lawyer with the law firm Gray Cary Ware & Freidenrich in Palo Alto, Calif., said that it ''is difficult to tell what she means'' about the prerelease, adding, ''It is fair to say this requires some thinking on the part of Napster as to what its obligations are.''

On the whole, Mr. Radcliffe said the ruling was ''a pretty big loss for Napster.'' He said the decision gave the company very little wiggle room to continue to be used as a forum for the free exchange of copyrighted works, absent permission of the copyright owners.

Hank Barry, the chief executive of Napster, is seeking to turn Napster into a for-pay service and has sought to make deals with record labels to provide them some proceeds from the business in exchange for rights to license their music. Already, Napster has struck one agreement with Bertelsmann's BMG, one of the five major record companies, but the others have resisted, saying Mr. Barry's offer of $1 billion in payments over five years is a paltry sum.

In a statement, Mr. Barry said Napster would comply with the court's order, adding, ''As we receive notice from copyright holders as required by the court, we will take every step within the limits of our system to exclude their copyrighted material from being shared.''

The Internet has called into question whether basic tenets of copyright law might be shaken by the ease with which works can now be distributed. But Mr. Radcliffe said today's ruling ''indicates to Internet service providers, Web sites and other third parties on the Internet that put up content that there are no special rules for the Internet.''